03
May
2013

Overcoming Obstacles to Recovering Settlement Costs from Insurers

Risk Management

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PUBLISHED ON: May 3, 2013

As many policyholders already know, prompt payments from insurance companies for settlement costs can be hard to come by. Often, the policyholder must settle a case without a commitment to help fund it from its insurer.

If the suit is substantial enough, a policyholder with cash-flow problems may be put out of business by its insurance company’s refusal to cover a settlement opportunity. This scenario is what some in the insurance industry refer to as “death of company.” But even if a policyholder has the wherewithal to fund a large settlement without its insurer’s contribution, challenges remain in the pursuit of an eventual insurance recovery.